As hopes for approval fade, SEC urges the consideration of Hashdex and ARK 21Shares Ether ETFs

The decision by the United States Securities and Exchange Commission (SEC) to postpone the approval of the Hashdex and ARK 21Shares spot Ether exchange-traded funds (ETFs) has been met with skepticism. The SEC’s deadline for both ETF applications is set for late May, with May 24 being the final decision date for ARK 21Shares and May 30 for Hashdex. However, analysts are doubtful about the approval of these ETFs, as well as the other proposed Ether ETFs from BlackRock, Grayscale, Fidelity, Invesco Galaxy, VanEck, Hashdex, and Franklin Templeton. Bloomberg ETF analyst James Seyffart expressed concerns about the lack of communication between the SEC and the issuers, leading him to change his previously optimistic stance on Ether ETFs. Another Bloomberg analyst, Eric Balchunas, also lowered the odds of Ether ETF approval from 50% to 35%. Public sentiment has also shifted, with the odds of Ether ETF approval by the end of May on Polymarket dropping to 32% from January’s 77%. Grayscale, in addition to its Ether ETF application, is considering adding staking to its offering. The company has proposed allowing its Grayscale Ethereum Trust to stake Ether held by the trust, which would help mitigate inflationary pressures and align with other investment products that offer staking. These proposals are subject to a vote and require the consent of over 50% of shares. If approved, Grayscale would join other issuers like ARK 21Shares, Franklin Templeton, and Fidelity in offering Ether staking.